Making the Leap from Online to Retail
Are you ready to be making the leap from online to retail? Making the leap from a life as an online brand to that of a retail brand in bricks and mortar stores, requires a new level of knowledge and relationships.
Written by Shelley Atkin, Tide Media
With the rise of online shopping, many health and wellness brands have launched solely in the online space. This has been exciting for both entrepreneurs and consumers, with an explosion of new offerings and delivered-to-your-door service.
Utilising social media marketing and an ecommerce store, these brands have achieved success, all without the overheads of a retail premise or the challenges of distribution agreements. However for many, the next goal is to take their brand mainstream – with the growth that comes from seeing their products achieve visibility and accessibility on the shelves of the biggest stores. The common question – how should I do that?
The journey can take a few different paths, and mistakes and learnings come from each step, or misstep. However, the following points are perhaps a healthy consideration, before taking the leap.
1. Consider the benefits
The allure of taking your brand into the retail channel is the volume gains. Whereby online orders from consumers are in personal quantities, receiving orders in carton quantities is the biggest benefit to your brand. This is followed by distribution points that put your product in front of your target customers whilst they’re out shopping. This delivers benefits in brand awareness, promotional sales, brand equity and market share but can you meet this volume demand efficiently and cost effectively? Review your systems so that you’re prepared for the growth.
2. Consider the costs
Yes, it requires bolstering of resources, however this need not be a deterrent as the cost-benefit of going into the retail channel can certainly be lucrative for your brand. It is important to be aware of the costs and plan for them, well ahead of taking the leap.
- Wholesaling cost/margin lowering
- Distributor margin
- Sales staff
- Trade terms
- Marketing/Co-op spend
- Account management
3. Choose your channels
Where you want to see your products, and where your customers actually are, may differ. I recommend doing some market research to find out where your customers shop (when not online). Is it the health food store, pharmacy, wholefoods grocer, discount vitamin store, beauty store, organic store, naturopathic clinic, supermarket or gym? Offering exclusivity to one channel may give you the support and results you’re after, but a channel strategy that balances the needs of these channels can also work.
4. Be desirable
One of the best ways to enter a wholesale partnership is with the cards stacked in your favour. Your product has hit their radar and they want it on their shelves. From here you have a great negotiating position and a good foundation for success. With effective marketing, you should build up the demand that shows your brand to be highly desirable to a retailer. It also avoids the ‘I’ll wait till I’m asked for it’ objection, often given by a retailer. When you make your pitch, include every marketing investment you’re making to show how you’ll drive that demand and demonstrate that you have researched the category.
5. Consider servicing
Whilst you may have the processes in place to manage the online orders of consumers, retailers and their warehouses will require a different level of servicing. Do you have the staff? Are they trained? Do you have marketing support in place for B:B? Sales reps on the ground or the phone to liaise and support your wholesale customers? A great CRM platform for managing communications? Does it integrate with your website for online ordering? With the right planning and preparation here, you can nurture the support from retailers.
6. Direct or distributor
The answers to point 5 may lead you to decide that distribution partners are the way to take your brand to the retail market. Based on your channel choices, there are many to talk to. Consider what your needs are and what’s important to you. I suggest getting an understanding of their values and ensuring you’re aligned with them. Relationships matter here, they’re an extension of your brand and will be representing you to potential customers. Avoid rushing entering into a distributor agreement before hitting the road and gaining feedback from your potential customers. What do they say about them? Are there any patterns of concern? Can the deliver your brand to customers along the buyer journey with the high standards you’re looking for?
There are consultants to help you with the negotiations and contracts that are a necessity here, to ensure you come away with a relationship that serves your brand towards your long term vision.
7. B:B marketing & sales
Whilst you can argue that marketing is human to human regardless of channel, resources will need to be put specifically towards nurturing the wholesale retailers supporting your brand.
Getting your offers right is an important first step, and critical step ongoing, to drive momentum and sales. Consider opening offers, parcel buys and other promotional tools in your sales program, and try to balance or integrate it with your direct to consumer program. One take home point is to not purposely undercut your retail partners with online pricing that is lower than RRP. That’s a surefire way to lose their support.
Consider the in store marketing you can offer with point of sale materials, training programs, in store tastings or demonstrations that will help your brand stand out amongst the many on the shelves.
If making the leap is your next step, spend the time considering these points in your strategy and you’ll be well prepared.
About the writer: Shelley Atkin
Shelley Atkin is a marketing strategist, content writer and digital expert with 20+ years in the health and wellness industry. Shelley is the founder of Tide Media, providing digital and content marketing support to businesses in the eco, health and wellness space. Her focus is on delivering strategies that connect brands with their customers, right where the tide is strongest.